Iranian authorities have again reversed their decision on the fate of American Sarah Shourd, saying today that she will now be released on $500,000 bail because of health problems, according to a senior Iranian prosecutor.

The announcement comes after three days of flip-flopping on the case by the Iranian government -- moves in a case that has further strained U.S.-Iranian relations.

Shourd has been detained along with her traveling companions, her fiance Shane Bauer and friend Josh Fattal, since July 2009, when the trio of hikers were picked up at the Iraq-Iran border and imprisoned under espionage charges.

"Based on reports and the approval of the relevant judge about the sickness of Ms. Shourd, her detention was converted to $500,000 bail, and if the bail is deposited, she can be released," Tehran prosecutor Abbas Jafari Dowlatabadias said, according to the official IRNA news agency.

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American Hiker to Be Released... Again

Conditions of Shourd's bail do not prevent her from leaving Iran, but she will still face trial along with Bauer and Fattal, who will remain in Iranian custody, according to Dowlatabadi.

Shourd's mother has stated that her daughter, who has been in solitary confinement, has been denied treatment for serious health conditions, including a breast lump and precancerous cervical cells.

"All of the three were fine and I was with them for about three hours," Masoud Shafiei, the lawyer for the three Americans, told The Associated Press. "Shourd will go home within the next two to three days."

Shafiei is now making arrangements for the $500,000 bail payment for Shourd with the Swiss Embassy in Tehran, which represents U.S. interests in Tehran.

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No Release for American Hiker

Iranian officials said Thursday that they planned to release Shourd on Saturday, but Friday they abruptly delayed the release. The semi-official Iranian news agency ILNA quoted the deputy chief of communication for the Iranian president's office, Mohammed Hassan Salilhimaram, as saying Shourd's release scheduled would be put off. He gave no further details.

Reuters news agency reported on Friday that Shourd's release was postponed due to unfinished legal procedures.

The announcement on Friday was a disappointment to Shourd's family, particularly because only hours earlier, Iran announced that Shourd's released had been moved from a hotel to a presidential palace in the capital of Tehran and state media reported that President Mahmoud Ahmadinejad had personally intervened to secure Shourd's release in part because of the "special viewpoint of the Islamic Republic of Iran on the dignity of women" and as an act of clemency to mark the end of the Muslim holy month of Ramadan.

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Iran Freeing 1 of 3 American Hikers

State Department spokeswoman Julie Reside said the United States was never able to confirm Shourd's release was certain.

"We have never had confirmation that Iran was intending to release her. We've seen press reports, we were pleased to hear that she would be released. We would be pleased if she were released. Needless to say we still remain concerned about all Americans who are held unjustly, including those held in Iran," Reside said.

Iranian experts saw in the delay signs of a political split in Tehran's leadership.

ILNA, the news agency that reported the delay, is the news outlet most critical of Ahmedinejad, and his political opponents didn't seem to like the president's apparent attempt to turn Shourd's release into a public relations boost for himself before next week's U.N. General Assembly.

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"Sarah has become victim of political bickering in the country. This shows how deep rifts within conservative establishment," Hadi Ghaemi of the International Campaign for Human Rights in Iran told ABC News.

The reversal came one day after an official in Iran's ministry of culture announced Thursday in a text message that one of the hikers would be released Saturday on the final day of the Muslim holy month of Ramadan.

ABC News later confirmed that Shourd, who has been suffering from a serious gynecological condition and had discovered a possibly cancerous lump in her breast, was the one to be released. Saturday is also the ninth anniversary of the 9/11 terror attacks.

When news of the release broke on Thursday, the hikers' mothers were cautiously jubilant and released a statement on Facebook.

Sarah Shourd Has Spent Most of 14 Months in Solitary Confinement

"We have seen the news reports and are urgently seeking further information," the statement said. "We hope and pray that the reports are true and that this signals the end of all three of our children's long and difficult detention. Shane, Sarah and Josh are all innocent and we continue to call for their immediate release, so that they can return home together and be reunited with our families."

Just minutes later, the administrator of the Facebook account, a "friend or family" of the hikers, commented on the post and said, "I AM PRAYING!!!! GOD - THANK YOU!!!"

Shourd spent most of her 14 month captivity in solitary confinement and was also reportedly depressed.

"I gave a letter to Tehran investigators and I warned about Sarah's situation and her health is very weak. They can hold them for up to a year for the investigation, but not more than a year if they haven't been given a proper trial," Shafie told ABC News through a translator. "I spoke to the investigator yesterday and notified them of this and God willing on Saturday Sarah will be released and hopefully also the other two.

"We hope. Nothing is certain until it actually happens, but God willing they will be released," he said.

Shourd, Bauer and Fattal were detained by Iranian authorities in July 2009 for allegedly wandering over the Iran-Iraq border and were accused of espionage.

On Aug. 10, the mothers made another open plea to Iran's leaders, invoking the sacred time of Ramadan and Shourd's "serious medical condition."

"Sarah has a serious medical condition and we are gravely concerned for her physical and emotional welfare, for which Iran's leaders are responsible. We urgently call on the Iranian authorities to end her isolation and provide her with adequate care," the mothers said in a statement on a website dedicated to the hikers' release.

In an interview with "GMA" in May, Shourd's mother Nora Shourd, said she wasn't sure what she would do when she finally was reunited with her daughter.

"I think I'm just going to say ridiculously silly things," Nora Shourd said. "'I'm so glad to see you, sweetie. How are you? I love you.' You know, just ordinary stuff."

Hiker's History of Reported Health Problems

At the time, Shourd's mother told "Good Morning America" she was concerned about her daughter because Swiss officials had told her the young woman was depressed. At the same time, The Associated Press reported Shourd was suffering from a serious gynecological condition.

After the initial reunion with their mothers in May, the three hikers spoke to reporters and described their captivity.

Shourd, who spent a majority of her captivity alone, said the food was "good" and, "we have medical care, which is appreciated."

Bauer, 28, said the group had a "decent relationship" with the guards and that "it's been civil."

Fattal, 28, said the officials eventually allowed the American to have books while in confinement.

"Once we started getting books that really helped the prison experience a lot," he said.

"The two countries are at odds with each other and we don't want this mixed in with that," Cindy Hickey told "Good Morning America" in early May.

Those tensions have been heightened by the U.S. effort to impose new sanctions on Iran in an effort to convince Iran to abandon its nuclear ambitions.

In an earlier interview with ABC News'George Stephanopoulos Iranian president Mahmoud Ahmadinejad said it was up to a judge to decide whether the hikers were telling the truth when they claimed that they simply got lost.

"They have to provide proof and evidence to the judge in Iran that shows that they lost their way or made a mistake," Ahmadinejad said then.

American Hikers Have Been in Iranian Jail Since July 2009

The Americans, all University of California-Berkeley graduates, entered northern Iraq with visas from Turkey on July 28 and planned to spend five days in the area, according to a website dedicated to the hikers' release.

"There's no doubt in my mind that if they crossed the border by accident, it was by accident," Bauer's mother, Cindy Hickey said.

In the early May interview, Ahmadinejad said he would make a recommendation to the judge to "render maximum cooperation" in regards to the case, but said he had no influence over the judge. The mothers said they saw more when they watched the interview.